The Aereo Case Isn't About Aereo, But About The Future Of Cloud Computing And Innovation

from the there's-much-more-at-stake-here dept

We've been writing quite a bit about the Aereo case lately, which is scheduled to be heard by the Supreme Court in late April. The case has an awful lot of powerful people and organizations lining up on both sides, filing briefs with the Supreme Court. Some have pointed out that Aereo's technology really isn't particularly innovative, and in fact, we've discussed how its setup is basically insane from a technology standpoint, but that the company is forced into building it that way to stay within the law (or so it and its supporters believe).

But some seem to be wondering why this one technology company, with something of a legal kludge is so important. It is incredibly important for reasons that have almost nothing to do with Aereo's actual service. Rather, it's about how the Supreme Court will interpret a key part of the Copyright Act, which could have an astoundingly bad chilling effect on pretty much all cloud computing. This may not seem obvious at first glance, since few people associate Aereo with cloud computing. Matt Schruers does a nice job breaking down the key point, however, as to why this one decision will have far reaching implications well beyond Aereo. And it all comes down to how the Supreme Court defines what is a "public performance."

Aereo’s position is that when Aereo subscribers pay for access to an antenna and direct it to send them back a unique copy of a particular broadcast, this is private. Different users access different antennae at different times, and each user receives a different copy of a work — even if they’re watching the same broadcast. Aereo isn’t rebroadcasting one work to thousands; it gives technology to thousands who at different times use that technology to access and possibly store different copies of works that they’re already lawfully entitled to receive. This is not unlike the Sony Betamax, which didn’t copy television, but gave thousands of consumers the technology to make reproductions of television content that they were already lawfully receiving.

Broadcasters have responded by saying that none of this matters; Aereo is infringing, they contend, so long as a given work is made available to multiple members of the public, even if Aereo does it with different unique copies, and at different times.

The problem with this rationale is that it applies with equal force to cloud storage like Dropbox, SkyDrive, iCloud, and Google Drive. If multiple people store their own, unique, lawfully acquired copy of the latest hit single in the cloud, and then play it to themselves over the Internet, that too sounds like the broadcasters’ version of a public performance. The anti-Aereo rationale doesn’t distinguish between Aereo and the cloud.

If you don't think that copyright holders won't take a victory here and go after various cloud services, you haven't been paying attention to the history of copyright fights over the past few decades.

And this is part of why the US Solicitor General's brief in support of the broadcasters is so ridiculously problematic. It tries to address that issue of cloud computing, by basically saying it might not be a big deal, because no company will require a license. However, other briefs in support of the broadcasters say it's no big deal because everyone can just get a license. One of those can't be true.

the U.S. Government (USG), for example, carefully hedges, saying that a decision for the broadcasters “need not threaten cloud computing.” It conspicuously does not argue that it will not threaten the cloud — only that the decision need not, implicitly conceding that a decision for the broadcasters could still be fatal for the cloud. The USG’s rationale is that as long as a consumer has lawfully acquired media in the first place, no cloud service need worry that someone will demand a license. Inconveniently for the USG, however, several other briefs filed concurrently argue that cloud computing services need not worry because, hey, everyone can just get a license! Setting aside the fact that there’s no way to ensure that all files in the cloud are licensed, this point substantially undercuts the USG’s position. Even as the USG is telling the Court that cloud services need not fear they’ll be demanded to take licenses for everything users put in the cloud, other interests are telling the Court that cloud services should do exactly that. Arguably, it doesn’t advance the broadcasters’ case that even their supporters cannot agree on whether cloud services would have licensing problems.

The ruling in this case matters, even if you don't care at all for Aereo's particular service. The wider impact on a variety of useful services could be massive. In fact, we've seen this before. Aereo's court wins to date rely heavily on the ruling that found Cablevision's remote DVR legal -- which similarly focused on defining whether or not that product involved a "public performance" that needed to be licensed. There, the court found that they did not. However, courts in other countries have found otherwise. That set up a nice natural experiment, and Harvard professor Josh Lerner looked at changes in venture capital investment into cloud computing offerings in the immediate aftermath of similar rulings, finding that the Cablevision ruling (saying not a public performance, and thus protecting the cloud) helped to spur tremendous investment in innovative new services -- to the tune of about $1 billion.

No matter what you think of Aereo, this decision will have a major impact on what sort of internet we have going forward.

Oh man...the US Supreme Court is known to see right through those hidden agendas at its highest level...That being said, the broadcasters seem to be trying to set a precedent for if or when Kim Dotcom gets extridited to the US for his Megaupload hearing.

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Right, each transmission of a publicly broadcast TV signal over a single wire any longer than your property line to a single person turns a private viewing into a public performance requiring a retransmission fee (in the backwards world of US copyright interests).

If Aero lose then somehow i can see the MAFIAA puushing to make it law that a person needs a licence just to remotely access their own computer from another source as accessing those files on your own computer from another source could construe to be a public rights performance if you ever happen to listen to those music files and watch thos movie files that you copied and stored on your computer from the cd's/dvd's that you bought.

We need to get out of here

Elected reps that haven't a clue, legal systems that are inimical to the future of mankind, people with primitive idea sets unable to have original thought and in control.

Man oh man. It would be cool to just have a clean way to get out of this.

I'm happy to buy the very few movies or TV series that have interest for me, to buy music on disc. I find newspapers expendable and most TV channels fairly useless. Just need a way to limit influence of these rubbish, to what I want, and keep them from preventing the future.

Failing that, in this reality, what choices are there:

1) Do a Ukraine on the idiots?2) Take interstellar voyager ONE to Epsilon Eridani?

Sheesh. We need to stop the decrepit brains from stopping the decent futures that can be.

Re: Copyhype

I can name at least four different problems with Hart's position.

1. Hart's only argument defending cloud services is that they are protected by the DMCA. But if cloud services' only legal recourse is the DMCA, then we're all in big, big trouble. It would mean that copyright holders could issue DMCA takedown notices of our own files stored on Dropbox, Google Drive, or OneDrive. Private cloud services are only viable if they don't need DMCA protection.

2. The relationship between Aero and its subscribers is the same as the relationship between cloud services and their subscribers. If Aero's service is a "public performance" mearly for that reason, then listening to an MP3 I uploaded to my Dropbox account is also a "public performance."

3. He makes a big deal about Aero being the source of the transmissions, but they are not. Aero does not decide the content or selection of the broadcasts; the TV stations do. Aero cannot select which of those stations' broadcasts are available on its service; that is determined by which TV stations are available, free, over-the air, in the antenna's location. Aero does not decide which of those TV stations users will watch; the users do. Aero's function is a "dumb conduit" between an individual antenna and a user.

4. He completely mis-applies the "volitional conduct test." That test determines the degree of liability for infringement, but it does not create infringement where there is none. Nobody is arguing that Aero's conduct is not volitional; they are arguing that it is not infringement. If it is not infringement, then it does not matter how volitional their conduct is. The entire test is a complete red herring.

Also, you should note that Copyhype is the opinion blog of Terry Hart. Hart is not an impartial observer, but a pro-copyright advocate. He is currently the Director of Legal Policy for the Copyright Alliance, a copyright maximalist organization (and his first gig out of law school). In fact, in this very case, they submitted an amicus brief supporting broadcasters (PDF).

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Tell you what walking shitbag. You tell me where I can BUY HD seasons of the show "24", not rent, not stream - BUY, and you can throw around "piracy" at will here. Or where I can legally purchase The John Larroquette show. Or Disney's Song of the South. I await your response. And no, you dont get to say "if they don't offer it, too bad, do without" because if that is a valid argument, so is "DON'T FUCKING CREATE THE MOVIE/SHOW IN THE FIRST PLACE." And before you blather on about 24 not being in HD, it most certainly IS in HD, at least on Netflix. And no, I want to OWN it, not "rent" it from a service that can and does yank HD content and shows at the whim of the copyright holder. Saw "American Ninja" (the original) on netflix 4 years ago in HD, was on the service for like a month, never seen it since nor can you buy it anywhere in HD. The movie was still there, just never in HD again. Why can't I buy this movie in HD, when clearly an HD version exists?

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Oops, you're right. I stand corrected. Copyhype is Hart's blog, so I usually assume articles on it are written by Hart himself. You know what they say about when you assume...

As far as Hartline goes, his opinions are also on the copyright maximalist side of the law. He is studying for a SJD at Tulane (after receiving a JD from Loyola in 2012). As far as I know, he has never been a practicing lawyer, so of course he's not on the payroll of any copyright advocacy organization.

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Yes, Mr. Hart's blog, but Mr. Hartline's article. As a candidate for an SJD he is working on a thesis delving into the ins and outs of law associated with Aereo (and others), because of which I do tend to pay close attention to what he has to say. The truth be known, within the legal profession the ones who are generally acknowledged to best understand substantive law are those who are newly minted graduates. One need only understand, for example, the role that clerks play in the Supreme Court. They author opinions, but the justices take all the credit (of course justices review and revise, but nowhere near as much as one would expect). Thus, I long ago ceased to consider how long one has actually been practicing as a key factor in knowledge of substantive law because in many cases (far too many to my liking) the longer they have practiced translates into less than perfect understanding of the law. Fortunately, there are always the 10% who actually keep up with the law and changes in real time.

I would never dismiss Mr. Hart's commentary merely because of the organization he represents. He does have an intimate familiarity with all sides of all issues in the area of copyright law, and my review of his commentary has led me to the conclusion that he is not one prone to "toe the party line".

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The truth be known, within the legal profession the ones who are generally acknowledged to best understand substantive law are those who are newly minted graduates. One need only understand, for example, the role that clerks play in the Supreme Court. They author opinions, but the justices take all the credit (of course justices review and revise, but nowhere near as much as one would expect). Thus, I long ago ceased to consider how long one has actually been practicing as a key factor in knowledge of substantive law because in many cases (far too many to my liking) the longer they have practiced translates into less than perfect understanding of the law.

Holy shit. You're lucky you comment anonymously, or I'd find a way to link back to the MANY, MANY comments from someone I'm sure is you repeatedly trumpeting your own decades of experience in the law as to why you understand these issues and we do not.

If multiple people store their own, unique, lawfully acquired copy of the latest hit single in the cloud, and then play it to themselves over the Internet, that too sounds like the broadcasters’ version of a public performance.

This seems like a stretch... unless the hit single was captured from a broadcast.

More Chicken Little antics. The simple equation is that Aereo seeks to profit from content it doesn't own or pay anything for.

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...or pay anything for.

Maybe, and this might sound crazy but hear me out, maybe that's because the 'content' they're using is a free broadcast.

Aereo isn't charging for the content, they're charging for the service, the ability for people to access the content when things like poor reception, houses/hills/trees blocking the transmission, and similar things would otherwise make it impossible for them to watch it.

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And your point is?

It's still free content they're dealing with, the broadcasters weren't getting paid by the viewers before Aereo came along, why should they suddenly deserve to get a cut out of a service another company came up with just because the other company found a way to get the transmission to even more people?

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Seriously? That's like charging TV manufacturers for the ability to watch TV programmes, as they have no 'value' without content - and making that licensing depend both on where the viewer is and where the programmes come from so the viewer has to cough up multiple times.

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Aereo provides access to FREE OTA content to people with an antenna that are out of range of the broadcast or are blocked by terain or other obstacles.In other words, ANYBODY with an antenna can watch it (and record it) for free.Aereo should be able to charge for providing that service.

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> Aereo provides access to FREE OTA content to people with an antenna that are out of range of the broadcast

Actually, no. To receive Aero you have to have a billing address within the broadcast area (and they somehow do some sort of geographical check your IP address, too -- though I don't know how flexible that is).

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He meant practical range - there will be areas both just in and just out of the nominal range that the broadcaster covers. After all, what about people who are in the area but get a lousy signal for whatever reason?

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...broadcasters say it's no big deal because everyone can just get a license. One of those can't be true.

It's pretty obvious which isn't true. As an example let me give you the picture of file sharing. Any of those sites would have given their left nut to be legally licensed. Because none of the IP holders would do so, much less do so at a reasonable cost, file sharing today is still unlicensed. As long as IP holders continue to be control freaks wanting the first born as part of price of licensing this getting a license will always be a problem.

Yes, Mr. Hart's blog, but Mr. Hartline's article. As a candidate for an SJD he is working on a thesis delving into the ins and outs of law associated with Aereo (and others), because of which I do tend to pay close attention to what he has to say. The truth be known, within the legal profession the ones who are generally acknowledged to best understand substantive law are those who are newly minted graduates. One need only understand, for example, the role that clerks play in the Supreme Court. They author opinions, but the justices take all the credit (of course justices review and revise, but nowhere near as much as one would expect). Thus, I long ago ceased to consider how long one has actually been practicing as a key factor in knowledge of substantive law because in many cases (far too many to my liking) the longer they have practiced translates into less than perfect understanding of the law. Fortunately, there are always the 10% who actually keep up with the law and changes in real time.

I would never dismiss Mr. Hart's commentary merely because of the organization he represents. He does have an intimate familiarity with all sides of all issues in the area of copyright law, and my review of his commentary has led me to the conclusion that he is not one prone to "toe the party line".

It's strange how Karl argues that we shouldn't listen to people with law degrees who have not practiced law, but then he thinks we should listen to him even though he's never even gone to law school. I guess his standards apply to everyone but him.

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While I may disagree with some of Karl's comments here and in other articles re copyright law, I respect him for the obviously significant time he has taken and continues to take to inform himself on the substantive law. In many instances his insights are more accurate and nuanced than many attorneys who, when waxing poetic on copyright law, are so obviously out of their element and doing no more than "shooting from the lip".

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While I may disagree with some of Karl's comments here and in other articles re copyright law, I respect him for the obviously significant time he has taken and continues to take to inform himself on the substantive law. In many instances his insights are more accurate and nuanced than many attorneys who, when waxing poetic on copyright law, are so obviously out of their element and doing no more than "shooting from the lip".

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I was going to reply to the original comment, but since this one explicitly mentions me (and is not threaded with that comment), I'll reply here.

As a candidate for an SJD he is working on a thesis delving into the ins and outs of law associated with Aereo (and others), because of which I do tend to pay close attention to what he has to say.

You should pay attention to what he says, but you should also put it in the context of other things he has said. And Hartline, like Hart, has consistently sided with copyright holders to the exclusion of any other considerations. This often comes in the form of misleading or questionable claims that turn out to be wrong. Like the idea that copyright infringement is theft, not long before a Florida judge ruled that the MPAA's use of the term "theft" in the Hotfile case is a "derogatory term" that "would serve to improperly inflame the jury." He also claimed that Righthaven had standing to sue, when every single judge (in multiple jurisdictions) who saw the SAA ruled that they didn't. He still does so even after the 9th Circuit Court ruled the same way every other court did.

It is also significant that many of his articles are written with direct feedback from Hart (like the "theft" article above), and a significant amount of his articles are cross-posted at Copyhype and no other legal blog. Put it all together, and you have someone who is not an impartial scholar, but an active advocate for copyright holders, and forms his legal opinions from other advocates. That doesn't mean he's wrong, but it does mean that you should be skeptical of what he says, and aware that his views do not represent mainstream copyright law.

I would never dismiss Mr. Hart's commentary merely because of the organization he represents.

I do not dismiss it, but I am very skeptical of it - for the same reasons as I am of Hartline. Truth be told, Hart was a rightsholder advocate long before he joined the Copyright Alliance. In fact, it's probaby why he joined the Copyright Alliance (or why the Copyright Alliance chose him).

Again, he's not necessarily wrong, but he's not impartial and doesn't represent the legal mainstream. You should take him with the same grain of salt that you take, say, Fox News.

Now, to the other A.C.

It's strange how Karl argues that we shouldn't listen to people with law degrees who have not practiced law, but then he thinks we should listen to him even though he's never even gone to law school. I guess his standards apply to everyone but him.

I have my opinions, and I obviously think they're right, or else I wouldn't have them. That doesn't mean you (or I) should completely disregard others' opinions, including Hart's and Hartline's.

And when I point out that Hartline is not a practicing lawyer, I am not saying that we shouldn't listen to him. I am pointing out that he has never tested his theories in court; and when those opinions are raised by others, they are often rejected.

Of course, I've never tested my theories in court either. But many people (including yourself, if you're who I think you are) have dismissed my opinions while considering theirs to be reliable - solely because they're "lawyers" and I'm not. If you want to make an argument from authority, you should at least understand what "authority" the other arguments have - and in their case, it's not very much.

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I see you are consistent in your professional elitism again which is really nothing more than a variant of an ad hom. An argument's validity is not made stronger or weaker by the credentials of the person making it.